Thurrock Council: 'Systemic weaknesses' led to £1.3bn debt

A council lost "substantial sums of public money" because of systemic weaknesses and a "dereliction" in leadership, a government-commissioned report has found.

Thurrock Council in Essex has debts of about £1.3bn after a series of failed investments largely in solar farms.

The report said the council finance director had "unlimited authority to invest in anything he felt fit".

The council's Conservative leader said he was "deeply sorry" for the failings.

The Department for Levelling Up, Housing and Communities intervened at the council in September and asked Essex County Council - a neighbouring local authority - to write a Best Value Inspection (BVI) report to investigate the failures and produce recommendations.

Tony McArdle OBE, the lead author of the long-awaited report, said: "Although serious mistakes have been made by individuals, the challenges facing the council stem from a series of self-sustaining, systemic weaknesses which have allowed for repeated failure."

He said failures were "enabled by dereliction in political and managerial leadership, inadequate governance arrangements and serious weaknesses in internal control".

The BVI report said the council's "unique investment strategy" could be traced back to May 2016 when it invested £24m in a solar farm in Swindon operated by Rockfire/Toucan.

Mr McArdle said in 2017-18, the council gave the then finance director Sean Clark permission to increase "non-specified" investments from £200m to £550m, and the cash limit for any one external fund manager from £75m up to £425m.

"This is an extraordinary expansion in the delegated authority of officers," said the report.

The value of the investments were approaching £1bn by early 2020 and there were plans to increase that to £2bn in future years, the report said.

Mr McArdle said "serious issues" were raised by July 2021 when £655m had been lent solely to Rockfire/Toucan for solar farm investments.

A lack of any investment cap for Mr Clark gave him "unlimited authority to invest in anything he felt fit", the report added.

The BVI report made eight recommendations for the council moving forward, including that councillor seats are voted for at "all-out" elections - starting in May 2025 - and not elected in thirds.

More than 80 people were questioned for the report, including Mr Clark, and 77 council employees submitted written questionnaire responses.

Gareth Davies, a reporter from the Bureau of Investigative Journalism who investigated the council's spending over several years, was also interviewed.

Mr McArdle added: "The council's lack of openness and transparency has given rise to a culture of insularity and complacency. Internal challenge has been discouraged and external criticism and challenge have been routinely dismissed."

Lee Rowley, Conservative minister for local government and building safety, said: "The people of Thurrock deserve a well-run council that can fund the delivery of good quality services in a sustainable and responsible way."

Mr Rowley confirmed in his statement that the government had given Thurrock £452m to fill its funding gap for 2022-23.

John Kent, the Labour opposition leader at the council, said Tory cabinet members "past and present who have been responsible for this catastrophe" should resign immediately.

Thurrock Council leader Andrew Jefferies said: "Whilst I am deeply sorry for the shocking and unacceptable failings of the past, I can pledge that under my new leadership the council will never repeat these mistakes."

He said he was proud of how staff and councillors "stepped up to tackle the major issues" in the report and he was "determined to protect vulnerable residents to ensure that essential services are delivered".

Dr Dave Smith, the new chief executive and managing director commissioner for the council, pointed out the report had recognised "areas of good practice".

Administrators for Toucan Energy Holdings 1 Limited is selling off the portfolio of 53 solar farms that the council helped finance with the £655m loan.

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